Russia and Cuba signed an agreement to relieve Cuba's $29 billion debt to the defunct Soviet Union, Reuters reports referring to anonymous Russian and European diplomats.
Moscow decided to write off $29 billion (90%) of $32 billion debt on condition that Cuba has to pay $3.2 billion over the following 10 years. Reuters noted the agreement must still be approved by the Duma, Russia's lower house of parliament. Neither Cuba nor Russia made any official comment on the debt agreement.
In February 2013, it became known about Russia’s commitment to forgive Cuba a part of the Soviet-era debt. However, it was not specified what amount of the debt would be written off exactly. The media reported that the debt relief could be valid on condition that the parties sign an aircraft leasing agreement.
Cuba declared default on its liabilities in mid 1980s. At that time, the country was indebted not only to the USSR, but also to some Paris Club’s members and China. In 2011, the ruling Communist party approved a five-year economic plan that called for efforts to "enhance Cuba's credibility in its international economic relations by strictly observing all the commitments that have been entered into." The plan asserts that the country has to restructure all its government and commercial debts and to settle the debt issue.
In addition, in 2011 Cuba lifted a ban from running private business. The ban was applicable since 1990s by means of robbery taxes and limited number of permits. However, recently, Havana has been following a more flexible market policy aiming to encourage people mainly employed in the public sector to deal with private business. In particular, the government eased loan conditions, allowed private entrepreneurs wholesale trade, and phased out two-peso currency system.